Even amid world-stopping tragedy, Auden reminded us: "The dogs go on with their doggy life and the torturer's horse/ Scratches its innocent behind on a tree." Equally, confronted with the really big headlines, you can trust Britain's media-political complex to carry on doing what it always does: asking the reassuringly piffling questions.

And how have the politicians and the commentariat responded to these two seismic shocks? Flick through the papers, listen to the radio and you'll hear discussion of How This Affects The Coalition – because that's obviously the first question to be raised over the country's breakfast tables. Columnists have referred, briefly, to the seven years of spending cuts that lie ahead, then speculated at length on the Westminster question du jour: Where All This Leaves Ed Balls. Faced with the economic equivalent of an earthquake, the parlia-crat has scratched its innocent behind and pondered what it means for Barratt's share price.

You don't need to agree with every decimal point of these forecasts to see how woefully short such responses fall. You might even think, as I do, that it's a mug's game to gauge the exact size of the post-crisis economy while we're still picking our way through the debris. But between these analyses from two respected institutions, the big picture is clear: this is the point at which an acute crisis becomes a chronic one; where the UK moves out of intensive care but wrestles with long-term stagnation. This protracted slump looks set to blight the lives and aspirations of families for far longer than a typical recession – and to diminish further Britain's sense of its own place in the world.

In modern times, the only other rich country that has undergone the kind of decline that now awaits us is Japan. Last November, I joined a visiting group of journalists speaking to ministers, economists and businesspeople to get an idea of what a lost decade looks and feels like.

Each dignitary would start with the same story – how the economy had pretty much flatlined ever since the property bubble pped at the start of the 90s, how their own incomes had not gone up at all for over a decade. But they rarely dwelled on the figures, talking instead about how the two lost decades had penetrated into every corner of social life. Yoshiyasu Ono, head of the cabinet's economic research institute, pointed out that the suicide rate – always high in Japan – had doubled, as more middle-aged salarymen took their lives.

Others pointed out that the young now had to take on temporary jobs with less money and security, and so were marrying later. Where youngsters once knuckled down in the hope of a lifetime position at Toyota or Fujitsu, diminished prospects prompted them into a very Japanese form of subversion – wearing outlandish clothes and pink hair dye. In Britain, where one in five young people are already locked out of the labour market, such persistent frustration is unlikely to breed cute non-conformity. It's hardly fanciful to see how it might lead to reruns of the kind of carnival of destruction seen this summer.

While Japan has endured two decades of near-zero growth, neighbours such as China and South Korea have surged ahead. Western executives used to eat sushi and swot up on the Japanese way of management; now they are more likely to fly to Guangdong. In Tokyo, they talk about "Japan-passing", how visitors to Asia now miss it off regional itineraries. Again, it's easy to see how that might translate to London in just a few years, as non-Europeans pay less heed to Westminster and much more to Berlin's Bundestag. In stark contrast to the noughties, the British economic model will be regularly compared to its neighbours – and found wanting.

What the Japanese sometimes term their lost generation has led to an attenuation of ambition at both individual and national level. Yet it is easy to visit its cities and completely miss out the fact that it has still been weathering an economic crisis. Throughout the past 20 years, the government has gone in for fiscal stimulus – as evidenced by its annual big-budget deficits – so that the infrastructure has been constantly renewed. In Britain, the coalition plans to slash spending on such big new projects – and there's no sign that the private sector will pick up the tab.

Two other aspects suggest Britain will have a much worse lost decade than Japan. First, Japanese companies hold on to their staff: the jobless rate over the past 20 years has never risen above 6%. Compare that with the British tradition of hire-and-fire, and an unemployment rate already marching up to 9%. Second, Japanese respect for equality means that even CEOs of big firms in the Nikkei take home an average wage of only 16 times the average worker. In Britain, a FTSE boss is paid closer to 88 times what his or her employees earn.

Am I confident in the predictions above? Of course not: too much is subject to change. But it's hard to survey the damage the lost decades have done to Japan and not think that the effects in somewhere as unequal as Britain are likely to be far more combustible.